ECONOMIC FORECAST
How public will bear brunt of fighting state corruption
Fighting corruption in the public sector will constrain economic growth in the medium term, analysts say. This is because the private sector will take on much of the cost through higher taxes as government spending is cut and public sector employment and wages slow. President Cyril Ramaphosa has vowed to tackle the scourge of corruption and state capture rampant under former president Jacob Zuma. Nedbank senior economist Nicky Weimar said tackling corruption and the inflated public sector wage bill would negatively affect growth.
"The public sector has become too big for the size of this economy," she said at the Nedgroup Investments Summit in Sandton on Thursday. She added that the public sector had outstripped the private sector, but this had driven consumer spending. "Short term, it inflicts a lot of costs that will hurt the economy. While it pays off in the long run, it will keep economic growth subdued," she said. Over the medium term, growth would be slow and driven by c...
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